LONDON: Oil prices steadied on Thursday, holding most of their recent gains before a meeting of oil producers that could extend production limits aimed at clearing a glut that has depressed the market for more than three years.
Ministers from the Organization of the Petroleum Exporting Countries, Russia and other producers meet in Vienna on Friday and are due to consider extending output cuts that began in January. OPEC and its allies have agreed to reduce output by about 1.8 million barrels per day (bpd) until March 2018 in an attempt to empty inventories. Many analysts now expect them to extend the deal, possibly to the end of next year.
“An extension of the agreement or an increase in the cuts may be announced,” said Jeffrey Halley of futures brokerage OANDA.
Brent crude oil LCOc1 was down 5 cents at $56.24 a barrel by 0820 GMT. US light crude was 15 cents lower at $50.54. Both contracts have risen more than 15 per cent over the last three months as global oil supply has tightened.
OPEC’s efforts have been hampered by higher production in some other parts of the world, including the United States, where shale oil production is reaching record highs.
Recent hurricanes in the Gulf of Mexico have also pushed up crude inventories in some parts of the United States as US refineries have been shut by flooding. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
